What Students in Regulatory Affairs Courses Should Know About the USMCA Trade Deal

February 12, 2019

The United States-Mexico-Canada Agreement (USMCA) is a free trade deal recently signed between North America’s three largest countries. Once ratified, it will replace the North American Free Trade Agreement (NAFTA) and it has major implications for the pharmaceutical industry, especially in terms of intellectual property rights.

In its current form, the USMCA could significantly change how pharmaceutical companies sell their products in Canada. Here’s what you need to know about the USMCA if you’re studying regulatory affairs.

The USMCA Will Extend Patent Protections for Biologics to 10 Years

The USMCA will extend the patent protection period for biologics—which are pharmaceutical drugs derived from or containing components of living organisms—from eight years to ten. What this means is that if a generic drug manufacturer wants to sell a generic version of a biologic (i.e., a biosimilar), it will have to wait ten years for the patent on that biologic to expire rather than the current eight years. Biologics are usually high-priced drugs, so the extra two years of patent protection will be highly beneficial to non-generic drug makers.

The USMCA will extend patent protections for biologics to 10 years in Canada

Patent Term Restorations Will Be Extended for “Unreasonable Delays”

Typically, pharmaceutical patents in Canada last for 20 years, but because drugs can take so long to develop and because patents are usually filed early on during development, drug makers have less than 20 years to actually sell and market new drugs. In 2017, as part of its free trade deal with the European Union, Canada introduced patent term restoration (PTR) that allows pharmaceutical companies to extend their patent terms by up to two years to address these development delays.

With USMCA, the PTR system will be extended to address “unreasonable delays” that arise when filing for a patent. This change is significant for anybody pursuing regulatory affairs certification to know about as it means that pharmaceutical companies may be able to extend their patents when their patent application has been delayed due to issues beyond their control.

Students in Regulatory Affairs Courses Should Know When These Changes Take Effect

Of course, for anybody studying regulatory affairs programs, it’s important to know when these changes take effect. Drug makers won’t actually feel the effects of the USMCA for a while. The extension of patent protections for biologics, for example, will only be fully implemented five years after the USMCA comes into force. As for the PTR system, that won’t be fully implemented until 4.5 years after the USMCA is fully ratified.

Regulatory Affairs Students Can Follow What Happens with Ratification

Complicating all of this is the fact that the USMCA still needs to be ratified by each country’s legislature. Canada and Mexico are waiting for the US to approve it first, but the US Congress is now resistant to doing so. Also complicating matters is the fact that both the 2019 Canadian federal election and the 2020 US Presidential election are on the horizon. In the event that the USMCA isn’t ratified, the current version of NAFTA will remain in force.